Hertz swings to loss after charges; core stronger

SaabiraChaudhuri

Hertz Global Holdings Inc.
HTZ, +2.29%
swung to a fourth-quarter loss as the car-rental company recorded charges tied to its acquisition of Dollar Thrifty Automotive Group Inc., however core earnings strengthened as revenue jumped sharply.

For the year, Hertz said it expects per-share earnings between $1.82 and $1.92 on revenue between $10.85 billion and $10.95 billion. Analysts polled by Thomson Reuters recently expected $1.78 a share on $10.79 billion.

Hertz, the second-largest car-rental company by fleet size, has posted stronger sales for about three years as the company benefits from a pickup in business and leisure travel since the end of the recession, as well as from acquisitions.

Going forward, results will be bolstered by its $2.3 billion acquisition of smaller peer Dollar Thrifty, which was approved by the U.S. Federal Trade Commission in November, ending a takeover saga that began in April 2010.

Monday, Chief Executive Mark P. Frissora said he was "pleased" with Hertz's "record" results, noting that the company's performance was helped by "improving pricing during the fourth quarter and the positive impact of strategic investments, including the acquisition of Dollar Thrifty Automotive Group."

The company also noted that synergies from Dollar Thrifty will likely exceed previous forecasts, now estimated at $300 million of cost synergies from 2013 through 2015, and $300 million of revenue synergies over this period.

Hertz reported a loss of $36.4 million, or nine cents a share, versus a year-earlier profit of $47.1 million, or 11 cents a share. The latest period included 24 cents in charges tied to the Dollar Thrifty acquisition. Excluding one-time items, per-share earnings were up at 33 cents versus 24 cents.

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